FINANCIAL ACCOUNTING - ACCESS
FINANCIAL ACCOUNTING - ACCESS
9th Edition
ISBN: 9781118680711
Author: Weygandt
Publisher: WILEY
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Chapter 12, Problem 1Q
To determine

Investment: It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in debt securities such as bonds or equity securities such as shares.

To explain: the reasons for companies investing in securities.

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Explanation of Solution

The reasons for investing in securities are explained below:

  • To earn returns by investing the excess cash generated by the company.
  • To generate income from investments in securities
  • To dominate the competitors or suppliers by gaining controlling interests over them through investments.
  •  To enter into a new industry through investments in other companies’ securities.

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FINANCIAL ACCOUNTING - ACCESS

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